Clear skies ahead for WiMax, LTE in 2009 and 2010

Fourth-generation knockdown! Sprint Nextel and Clearwire have set their cities …

We now know the battlefield on which the fight will be engaged for the hearts, minds, and—most importantly—the wallets of those who would use faster, ubiquitous broadband wireless networks. These so-called fourth-generation (4G) cellular data networks employ competing technologies: WiMax and LTE (Long Term Evolution). Clearwire and Sprint Nextel (the majority owner of Clearwire) have confirmed their deployment plan for WiMax, setting the stage.

LTE has a vast amount of worldwide commitment from GSM carriers, and even long-time CDMA operator Verizon Wireless will switch over to LTE for its 4G future. WiMax's biggest worldwide backer? Sprint Nextel, which is essentially pinning its future on WiMax.

The two technologies aren't that far apart in the details, and there's been a fair amount of talk about an eventual convergence, in which one device would be able to use different profiles but communicate with either kind of network standard.

Cellular standards are often long delayed beyond projections in their deployment; a lot of good money is on 2012 as the first year for broad major metro LTE availability. Sprint and Clearwire's WiMax rollout is about two years later than planned, by the way.

The key difference today is that Clearwire's flavor of WiMax—technically, the WiMax profile of bandwidth and encoding style it's chosen—maxes out at about 12Mbps, with typical performance expected in the 2 to 4Mbps range. LTE in a typical deployment will have a 50 to 100Mbps pool of bandwidth, and individual users will likely see 5 to 10Mbps on average. If either Clearwire or LTE operators choose to allocate more spectrum, they could offer more bandwidth.

The other difference is that LTE is a technology for next year (or the year after); WiMax is starting its serious rollout in the US right now, with 120 million to be passed by the end of 2010. Sprint Nextel, pre-Clearwire deal, claimed it chose WiMax over LTE and a now-discontinued Qualcomm standard because of near-term availability coupled with flexible profile design.

LTE may be available in one or two markets in the US this year, offered by Verizon Wireless, in a pre-production release. Real deployments are likely to not be fully underway until some time in 2010. Cellular standards are often long delayed beyond projections in their deployment; a lot of good money is on 2012 as the first year for broad major metro LTE availability. Sprint and Clearwire's WiMax rollout is about two years later than planned, by the way.

Earlier this month, Clearwire announced the set of metropolitan areas across the US in which the company would install its Clear-branded service. Baltimore came online last year (via Sprint, before it rolled its WiMax division into Clearwire) and Portland, OR, in January. Clearwire listed a few dozen cities for 2009, including Seattle (Clearwire is headquartered in nearby Kirkland), Atlanta, Chicago, Dallas/Ft. Worth, and Philadelphia. In 2010, Boston, Houston, New York City, and the San Francisco Bay Area will be among those markets getting WiMax.

Today, Sprint Nextel put out its own press release confirming its participation. Although Sprint owns 51 percent of Clearwire, it's forging ahead with continuing to tune and advance its 3G EVDO network. Part of this strategy requires dual 3G/4G adapters, which Sprint already offers (the $130 USB U300, which has a $50 rebate available).

Clearwire is pushing for WiMax as both a fixed service for homes and businesses including unlimited voice calling and both mobile and nomadic options; for many subscribers, it might be a combination of all three in a single bundle, with mobile rates far below comparable 3G plans.

Clearwire plans to introduce its own 3G/4G hybrid modem, as well as a nomadic WiFi/WiMax gateway, designed to allow use wherever a plug or inverter exists, much like today's 3G cell gateways for cars and roaming workgroups.

The service may also be resold by a variety of partners that don't compete in the wireless market. For instance, Comcast will resell Clear, even though Comcast competes for home broadband dollars. Comcast invested in Clearwire to give it a quadruple play: it can deliver video, voice, and data over its coax to a home, but Clear gives it mobile voice and mobile data, including video streaming. Time Warner Cable and Bright House Networks also invested, and Sprint—which has no landline business—has worked with multiple-system cable operators for the quad part of quadruple play, too.

LTE's competitive advantage here should be the vast array of existing manufacturers of GSM equipment that will make 2G/3G/4G devices with full compatibility across all generations of cell technology. LTE-migrating carriers can transition existing customers to new hardware and perhaps higher service plans without having to spend the money to acquire them in the first place.

Further, some of the 700 MHz license that AT&T and Verizon acquired 15 months ago carries with it buildout requirements that will make it likely that underserved and unserved populations in somewhat less urban areas will have access to speeds via LTE where WiMax will never be built, cable plants don't exist, and telephone wiring is too far from a central office to deliver real DSL. Satellite would be the only real alternative.

What remains to be seen is how fast WiMax can find a market among those who want flexibility, and who may (without realizing who has invested in Clearwire) want to steer clear of the major telecom and cable operators. If WiMax takes hold, LTE will have a much harder competitive row to hoe—and that could result in lower prices for consumers and businesses if there's actual competition for our wireless broadband spending.